Cost Benefit Analysis

CostBenefit Analysis

NewOrleans was hit by one of the most costly and damaging hurricanes inthe United States history. A major disappointing issue as to why thecity was hit was because of human engineering error. Others arguedthat there were warnings issued before Hurricanes Katrina hit NewOrleans. There were many studies done showing the likelihood thatthere would be a hurricane hitting the area (Kates et al., 2012). Thearea is projected to have future catastrophic hurricane events in thearea therefore there should be measures put in place to minimize thedamage that will be made when such an event was to occur again. Thisreport will focus on the cost-benefit analysis of rebuilding the cityof New Orleans.

Plansfor rebuilding the city

Theplans that are proposed are for rebuilding the city of New Orleansafter it was hit by Hurricane Katrina. The short term which isbetween 0 to 50 years will have a cost of around $23 billion therewill be a $1 million bill augmentation for each homestead that issubsidized by the government so as to bring it to the newspecifications. There are similar projects that have been there inthe past and projections from different organizations that havecalculated the costs of rebuilding the New Orleans area. Thelong-term cost of the city of New Orleans which is between 50 to 100years totals to around $85 billion. These figures are extrapolated,and they are dependent on the assessment of the city in the future.This would be beneficial to the ecosystem of the area and theresidents of the city of New Orleans. These figures are supposed tocater for the heightening storm intensity and rising sea levels so asto have the least impact on people living in the area.

Toput the cost in perspective the prices of reconstructing the cityshould be calculated and the plans on cost calculation are FEMAshould receive $5.5 billion to replace and repair publicinfrastructure that is damaged such as bridges, water systems, publicutilities, roads, schools, and public buildings, as well as fundingdebris removal and emergency protective measures. The City’sdepartment of transportation should receive $62.6 million to rebuildand repair air transportation infrastructure. The Department ofAgriculture in U.S should receive $250 million to help those farmersthat had been impacted by the hurricane. These funds are meant tohelp offset increased feed costs and livestock feed loss 4,000farmers noninsured crop assistance payment assistance for debriscleanup reimbursement for deceased livestock from 1200 farmers,aquaculture grants from 1700 farmers, and rehabilitating andreplanting trees from 800 farmers. The U.S department of commerceshould receive $1.3 million which will be used in NationalTelecommunications and Information Administration (NTIA) to help withhurricane-related assistance to help public broadcasting stations inthe Gulf Coast (Kates et al., 2012). The corps of engineers in theU.S army should receive $3 billion which will be used to reconstructthe levees to the levels before Hurricane Katrina. The USDA shouldreceive $505 million for the emergency forestry conservation program,conservation reserve program as this will help operators andlandowners enhance and restore hurricane-damaged forestland.

CostBenefit Analysis

Mostof the provided numbers were funds that were deputed to the gulfcoast region that was negatively impacted by the Hurricane Katrina.The numbers were modified based on the estimation of the amount offunds which would be deputed to particularly for the reconstructionof Louisiana. It is worth to note that this is a cost in the shortterm and takes the city back to the previous preparedness state. Itdoes not contain anything which addresses the issues brought about byHurricane Katrina such as wetland loss, faulty levees, or theevacuation plans which were poor. This would lead to furtherlong-term expenditures since it would render the city at risk of moredestruction in the future. Undoubtedly, this is not the most suitablesolution to the problem that New Orleans is facing. The costs wouldbe as follows:

• Restorationof wetland: $24,435,000,000

• Phaseout of the industry and people: $40,000,000,000

• Repairand maintenance of Levee: 15,000,000,000

• Rivermaintenance and monitoring of Mississippi River: $3,500,000,000

Finally,this plan makes a comparison of the expenditure of the oppositeextremes. In theory, the infrastructure that remains could bedestroyed and the debris can be removed so that the water body canoverflow the banks and have the area as a flood basin. This would nottake note of the cultural and social benefits of the New Orleanscity. There would be a loss in not just it’s historically andculturally area, but it would also lose a lot of money which wouldcome from the tourism sector. Notably, there would also be a loss ofdestroying the city and removing the debris. In total, the estimateof the amounts would be $293 billion for the next ten to fifty years.Despite the fact that this would be costlier in the short-term, thelong-term costs are comparatively not significant since the areawould be neglected to nature. The total cost would be much greaterthat the plan. Despite the costs, it would be a challenge to makesuch a plan to be practical. The citizens of the area are muchattached to their city, thus it would be unfair to force them tostop their usual way of living just because the water body can be ontheir land as stated by Kates et al (2012).

Inthis plan, the costs would be as follows:

• Lossof tourism: $100,000,000,000

• Jobsloss (income): $100,000,000,000

• De-reconstruction:$53, 000,000,000

• Removalof debris: $40,000,000,000

• Total:$293,000,000,000


Insummary, the first plan is meant to be used for comparison purposes.It shows the cost of rebuilding New Orleans to the levels it was inbefore the Hurricane Katrina, without making any developments. Thesecond part shows the calculations which were put to use to work outthe costs involved in the plan which was preferred to execute in NewOrleans. This final part is also to be used for comparison purposes.It shows the costs for the full deconstruction of New Orleans, andensuring that the water body reclaims the area back. In a practicalsense, the plan developed is the most beneficial and cost effectiveto the City of New Orleans. Social heuristics can be used to anadvantage by reducing the effort of decision-making and promotingsocially defensible and comprehensible, and discouraging thediffusion of the industry’s available innovations. In an ethicalsense, the decision would solely be based on the safety of the peoplein the area which will be reconstructed. In an unethical sense, thedecisions made may not fully benefit the people living there as theywould have to shift from their homes.


Kates,R. W., Colten, C. E., Laska, S., &amp Leatherman, S. P. (2012).Reconstruction of New Orleans after Hurricane Katrina: a researchperspective. Proceedingsof the National Academy of Sciences,103(40), 14653-14660.